High oil prices are often blamed on speculators, but it is perfectly possible to explain recent oil price history in terms of supply and demand forces, argues energy consultant Steven Kopits. His analysis shows that it was the reluctance of US consumers to reduce oil demand in the face of rising oil prices that led to the price spike in 2008. If this is true, then why did prices peak again in 2012, although US consumers had adjusted their consumption? Because, says Kopits, prices are not set anymore in the US, but in China. That's the bad news: in the battle for barrels, China and the other emerging economies will force the US and other OECD countries to yield consumption.

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